Shop Talk

Check Out Line: Young professionals trimming turkey-time travel, spending

Check out a survey showing that younger U.S. consumers are trimming travel plans as well as turkeys during Thanksgiving.      More young professionals (37 percent) are adjusting their Thanksgiving travel and spending plans than the affluent and general population (both 30 percent), according to a survey by American Express. Young professionals are defined as less than 30 years old, having a college degree and a minimum annual household income of $50,000.      The young guns also are pulling back in other areas:   * 11 percent of young professionals plan to drive instead of flying, compared to 7 percent of the general population and 6 percent of the affluent, who are defined as having a minimum annual household income of $100,000.       * 8 percent of young pros plan to shorten their stay for the Thanksgiving holiday weekend, compared to the affluent and general population (both 3 percent).    * 7 percent of young pros will use rewards points, miles and special offers to offset the cost, versus 4 percent of the affluent and 3 percent of the general population.      Overall, American Express found 30 percent of U.S. consumers plan to adjust this year’s travel plans for Thanksgiving — historically one of the busiest travel days of the year — but only 21 percent expect those expenses to decline from last year.      Those who are changing their plans said they will rely more on travel by car, stay for a shorter time and cash in rewards to help pay for holiday trips as they become more selective amid the high unemployment and soft housing market.

However, in a positive sign, sales at U.S. retailers excluding vehicle sales rose for the second straight month in September, raising cautious optimism consumer spending could support the economic recovery.      The American Express survey also showed that the young professionals are cutting back for Halloween, when consumers spent $5.8 billion last year according to the National Retail Federation.      * 36 percent of young pros are buying less expensive costumes and decorations.  The rate is 16 percent among the affluent group and 15 percent among the general population. 

* 26 percent of young pros are making their own costumes or using hand-me-downs.  Again, that is higher than the 13 percent of affluent respondents and 11 percent of the general population.       Looking ahead to the winter holiday season, sale prices are still king when it comes to early shoppers.  Eighty-two percent overall said they would be enticed by some sort of discount, with almost all of the young professionals (96 percent) and affluent (94 percent) agreeing.      It appears easier to entice the young set.  They would be willing to spend with discounts as low as 10 percent, according to American Express.  The affluent said it would take a discount of nearly 30 percent, on average, for them to buy.        Also in the basket:

Pepsi, Anheuser to jointly buy goods, services

Kraft opens $50 mln Russian biscuit factory

Host Hotels beats estimates on cost cuts

Diageo’s Q1 sales dip 6 pct, sending shares lower 

J.C. Penney discounts go mobile

J.C. Penney discounts are going mobile as the department store takes aim at younger, tech-savvy shoppers.

Just in time for the crucial holiday shopping season, the company is testing a discount program from Cellfire that will allow Penney’s Houston-area shoppers to use their cell phones to download coupons that can be presented at checkout for savings.

The move comes as Penney gears up for the holiday shopping season — a crucial sales period for department stores and other retailers.

“It’s another way we’re innovating to enhance the customer’s shopping experience,” Mike Boylson, the company’s chief marketing officer said in a statement.

J.C. Penney’s test currently is limited to the Houston metro area. A promotion on Cellfire’s website reads: “Take $10 off a single purchase of $25 or more in store, jcp.com & catalog when you use your JCPenney card.”

Cellfire’s website also shows coupons for other area stores stores such as Sears and Kroger.

Shoppers who have downloaded Cellfire will have access to the same discounts that Penney sends via snail mail, and new offers will be available nearly every week. 

Wider aisles? Cleaner stores? Must be Wal-Mart’s Project Impact

Wal-Mart has a plan to keep shoppers coming into its discount stores once the economy improves and it is called ”Project Impact.”

While the retailer lost customers during the boom years as shoppers spent their dollars in the brighter, cleaner stores of its competitors, Wal-Mart is trying to make sure that doesn’t happen again.

Under Project Impact it is renovating its U.S. discount stores,  widening its aisles, lowering fixtures, improving its signs, installing wooden floors, and adding skylights to present shoppers with a store that fees open and “friendly.”

Check out a little video of a prototype store.

(Photo: Reuters\Jessica Rinaldhi; Video\Lisa Baertlein)

Check Out Line: No discounts? no customers

Check out Abercrombie & Fitch’s falling profits.

The company played a remix of “Cold as Ice” as hold music for its conference call with analysts. It’s hard to tell if it is supposed to be ironic, or if the company is just tone deaf.    The latter could be possible, as Abercrombie has decided to tune out consumer’s expectations that retailers will offer discounts to try to get them in the door.   In November, CEO Mike Jeffries said the short-term relief provided by promotions would have the affect of damaging the brand in the long term.  He defended the strategy again on Friday, though the company has cut some prices at its Hollister and abercrombie chains.   But if people stop going to your store, do they eventually forget about your brand?   Abercrombie’s same-store sales fell 25 percent in the key fourth quarter. Of course, refusing to discount (other than on clearance items) protects profits. Or maybe not. Net income fell 68 percent, though some of the decline was related to a new employment agreement for the CEO.   Also in the basket:   PepsiCo Q4 profit falls, but matches Wall St view   Sears launching online service to connect clients, contractors (Chicago Tribune)   Starbucks to sell instant coffee   Microsoft to open own stores, take on Apple

Check Out Line: Shoppers resist last-minute urges

Check Out low shopper turnout just before Christmas.

Only 38.7 percent of consumers in a survey were out for some last-minute holiday shopping in the weekend before Christmas — the smallest number in six years, according to the survey conducted by America’s Research Group and UBS.

Traffic was especially weak in the U.S. Northeast and Midwest, which were slammed by winter storms over the weekend. That kept scores of people at home, but those who did venture out seemed to opt for stores that had deep discounts going on.  Wal-Mart Stores, the world’s largest retailer, attracted over two-thirds of consumers, the survey found.

Other results from the survey include:

* 68.5 percent of shoppers are 90 percent or more done with shopping this year, the highest level since 2002.

* A greater number of parents, at 74.8 percent, are finished buying children’s gifts. That’s the highest level since 2003.

*Gift cards as a category are down to 51.5 percent, the lowest level since 2005. Only 11.8 percent of parents said that they bought gift cards for their children this Christmas as there was no “must have” gift. In 2007, that number was 26.3 percent.

Toys “R” Us touts Black Friday discounts to shoppers

Take as long as you need to recover from that big Thanksgiving meal this year.

This Black Friday, Toys “R” Us is holding an additional hour of door-buster deals  as it tries to get a bigger bite of sales this holiday season.

The specialty toy retailer is discounting more than 150 items this year, compared to the 101 that it announced a year ago. Shoppers can snap up toys and games at those special prices from 5 a.m. to 1 p.m. on Nov. 28, known in the retail industry as Black Friday, the traditional kick-off to the holiday shopping season. Last year, the door-buster deals were finished by noon.

Toys “R” Us is waging price wars against retailers like Wal-Mart Stores Inc, the world’s largest retailer, known for its low prices. Wal-Mart has already unleashed a round of price cuts on toys in October when it offered 10 popular toys for $10 each, and plans to cut prices every week until Christmas as it tries to win over cash-strapped consumers.

While a massive toy recall played on consumers’ minds last year, the state of the global economy has easily overtaken those concerns this holiday season. Consumers are expected to continue shopping carefully and  hunt for bargains, and Toys “R” Us is gearing up to meet those demands. The company is allowing consumers to peek at 50 unadvertised door-buster deals online beginning Nov. 26 at midnight. Last year it posted 40 mystery deals online. 

Toys “R” Us Black Friday door-buster deals this year include:

* Free Play Station 2 Deal – 6 FREE Games, FREE “21″ DVD and Free Play Station 2  DVD Remote with the purchase of the Play Station 2 System

Sam’s Club tries luring new members with $10 deal

Wal-Mart is betting $10 and 10 weeks will draw new members to its Sam’s Club warehouses.

Sam’s Club and Costco work as membership clubs. Shoppers pay an annual fee that allows them to shop in the warehouses and get discounts on everything from diamond rings and big screen TVs, to bulk-sized packages of toilet paper or bottled water.

In the past year, the clubs have become popular with consumers and small businesses looking for ways to stretch their budgets as prices rise and paychecks shrink. But in this environment, cash-strapped customers may find the upfront fee a deterrent to joining the clubs if they are not already members.

Sam’s offers a variety of memberships, including a $40 one for individuals and a $35 membership for business customers that allows them to shop during special “business only” hours.

Sam’s Club has talked about wanting to improve its membership base, and in its latest push, it is now offering a $10 membership good for 10 weeks to families and businesses that are not currently members.

“With a temporary 10 week membership we’ll be able to give those who sign up a good chance to see what we can do for them everyday, and through the holidays,” said Mike Turner, vice president of membership at Sam’s Club, in a statement.

In July, Sam’s Club offered a special deal to attract college students. With a valid college identification card and college email address, students were able to buy a year-long membership for $40 and receive a $15 gift card.

The bodegas are coming! The bodegas are coming!

The drink cooler is lined with linens. The fridge is stocked with jeans. The soup cans don designer labels.

It’s Target‘s take on the local New York City bodega as the discount retailer prepares to open four “Bullseye Bodegas” in Manhattan. 

Bloggers got a preview of the bodega on 57th Street in Manhattan, and the four temporary stores, which are scattered throughout the borough, will open to the public for four days starting on Sept. 12 at 10 am.

The bodegas are stocked with merchandise made exclusively for Target by 22 designers, including maternity wear by Liz Lange, kitchen appliances by Michael Graves, and makeup by Jemma Kidd. The soup cans, featuring the names of the Target designers, are just for display, as are the Target paper towels that serve as a wall around the dressing rooms.

“New York is where you go to get noticed,” said Target spokesman Joshua Thomas of the retailer’s decision to open the pop-up stores. Target’s first Manhattan store is set to open in 2009, but the temporary bodegas will help it generate buzz, he said.

The bodegas will also help Target show that designer goods can be had at discount prices.

“It’s design, it’s quality, but it’s affordability,” Thomas said. The average selling price for a piece of bodega merchandise is $25. There are Sigerson Morrison high heels for $34.99, Anya Hindmarch clutches for $19.99, and Thomas O’Brien towels for $9.99.